The UK Experience in Perspective

In this timely book, David Milman considers how UK corporate law has been affected by the forces of globalisation, arguing that this is not a new development, but rather is part of an historical continuum. He examines corporate law regulatory strategy in general, treatment of foreign shareholders and multinational groups, aspects of private international law and issues connected with cross border insolvency.

Chapter 4: Foreign shareholders and non-resident controllers

Monograph Chapter

Extract

1 EXPLOITATION OF UK COMPANY LAW BY FOREIGN ENTRANTS In this chapter, we propose to consider the relationship between UK Company Law and a range of overseas players, namely foreign shareholders and nonnational directors. Issues connected with the non-residence of an actor (as opposed to foreign nationality) will also be addressed in the course of the discussion. This is a topical question at the start of the 21st century. There is much media attention being paid at the moment to the fact that UK firms are being bought up by foreign investors at a record rate.1 The number of English Premier League football clubs falling under overseas control has merely served as a microcosm highlighting this more pervasive issue for the average man and woman in the street. 2 2.1 THE OVERSEAS SHAREHOLDER Statistical Significance Since the dawn of modern company law, overseas shareholders have always been present on the UK corporate scene, because the City of London has always been seen as a magnet for foreign capital.2 For example, in the 18th century foreign investors are believed to have held some 15 per cent of government bonds. One reason for this was the availability of a capital market operating within a stable political economy. Moving forward to the 20th See The Times, 8 November 2006, p. 54. For a history of the City of London and the drive to attract foreign capital, see R.C. Michie, The London Stock Exchange: A History (1999) (OUP). More generally, see G. Gilligan, chapter...

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